VW topples off while Toyota reclaims top spot

Toyota's top executive advises: Don't obsess over being Number One. 

Volkswagen had only managed to knock Toyota off the top spot as the top selling carmaker back in June, but its reign was short and not very sweet. Toyota has reclaimed the crown after VW found itself embroiled in the diesel emissions scandal that has dealt a damaging blow to the German automaker's reputation and sales.

From January to September 2015, Toyota sold 7.5 million vehicles, surpassing VW’s sales numbers by some 70,000 units. Both marques suffered 1.5% decline in sales year-on-year, but Toyota managed to sell more than VW in each month of the third quarter, which – coincidence or not – was when VW admitted to fitting its diesel cars with a defeat device to cheat on emissions test. Very quickly after the news broke, VW’s share of the European car market began to shrink, falling from 26.5% in August to 23.3% the following month. Sales also fell in China, Brazil and the US.

VW had planned to gain market share in the US by offering “clean diesel”, in hopes of doubling sales in that region by 2018. It was part of the company’s strategy to strengthen its reign as the world’s biggest carmaker, but that now seems like an impossibility. It is likely that VW’s global market share will continue to teeter behind Toyota. General Motors had the third highest sales number, having sold 7.2 million vehicles in the first nine months of the year, and as the American brand slowly recovers from the faulty ignition scandal, it might even take over VW in the second spot. 

Even during the short time that VW was identified with the superlative of top-selling global automaker, industry experts believed that the company's more than 300 models, numerous brands and close to 120 factories made it a cumbersome entity that was churning out unsustainable sales numbers. Former Chief Executive, Martin Winterkorn, had earlier survived a boardroom coup, which is rumoured to be partly due to concerns that VW was chasing global sales, without paying attention to research, and still failing to gain a strong foothold in North America. In less than a week after the scandal broke, Winterkorn had quit.

While VW had taken the diesel route, Toyota focused on developing its hybrid technology. The Japanese automaker has held the number one position every year since 2008, after overtaking GM, except for 2011 when the tsunami disrupted manufacturing, and GM temporarily regained the top spot. Toyota is set to release a redesigned version of its best-selling hybrid car, the Prius, and there is no better time than now, amidst the diesel scandal. Toyota promises even better fuel economy and a sportier ride with the new Prius.

Toyota’s President, Akio Toyoda, did not remark directly when reporters at the Tokyo Motor Show prompted him for his thoughts on the emissions-rigging issue. In 2010, Winterkorn had announced that VW had its sight set on usurping Toyota from the top position by 2018. But Akio is trying to distance himself from business strategies like Winterkorn’s or his predecessors. He even referenced the unintended-acceleration crisis that his own company went through some four years ago. "Toyota had quality issues in the past, and because of these problems, we have been able to restructure and reform. In that regard, we are strongly committed not to repeat the same mistakes," he said.

“I myself won’t talk much about the volume and the size of our business. If I just talk about numeric targets, then everybody would be very sensitive,” Akio continued. 

He also declared, “I want everybody in the world to see our company as the greatest car manufacturer, rather than the biggest.” 

image: consumerreports.org